Luxury Property – Investing in Portugal

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It is imperative that you have the energy certificate ready if you wish to sell or rent your home. Nduni Property Portfolio & Management offer this service so do contact us and we can have it to you in about a week.

Energy Performance Certificate, 7 questions

An Energy Performance Certificate is compulsory from the moment a new or existing property is commercially advertised for sale or rent, directly by the owner or by a real estate agent. This document which attests to the energy grading has to be produced whenever a purchase/sale contract, leasing or rental contract takes place.

What is an energy performance certificate?

It’s a document that evaluates the energy efficiency of the property using a scale from A+(very efficient) to G(poor efficiency), issued by authorised technicians of ADENE(government energy agency). It contains information about characteristics of energy consumption relating to heating of sanitation water. It indicates measures such as the installation of double glazed windows or reinforced insulation amongst others for helping to reduce energy consumption. The document is valid for a period of 10 years.

What determines the class of energy?

The location of the property, the year of construction, if it is a building or a home, which floor the property is on and the floor area. The construction materials used for walls, floors, roof, and windows. Finally, the equipment relating to acclimatization (ventilation, heating and air conditioning) as well as producing the heating water for bathing.

How to apply?

Get in touch with us by phone +351 21 486 7767 or by email. We will proceed with the application for the certificate once we have all the necessary documents. Once the property has been visited and assessed, the qualified expert will insert the calculated evaluation into the National Energy Certificate and the Quality of the Internal Air in the Buildings.

What are the costs?

The costs for the registration and issue of the certificates for a home vary between €135 (Studio to 1 Bedroom) to €165 (more than 6 bedrooms), plus VAT. In the case of commercial and service buildings, it oscillates between €150 (area in use up to 250 m2) to €950 (more than 5000 m2), plus VAT. Add to this value the amount payable to the qualified expert, which is not included. It is advisable to compare prices. Fees can vary substantially depending on the technician, type of property and location.

You could be exempt from taxes in the case of the building already possessing an energy certificate and being in compliance with the indicated stipulations. For this to happen you need to comply with 3 conditions: the original certificate must be less than 10 years old (validation period), the measures taken having improved the energy grade and after its implementation the building obtaining a minimum rating of B-.

How long does it take?

Given that the experts have to handle all aspects of the process, it could take 2 to 3 days and should take not more than a week.

What documents are required?

A copy of the floor plans, “caderneta predial urbana” (which can be printed from the finance portal), “certidão de registo” (available from the “conservatoria”), and habitation license (or other documents with technical specifications of materials used)

How much are the fines?

Individuals in breach are subject to a fine of between 250 and 3740 euros, whereas companies/businesses can be fined between 2500 and 44890 euros.

Foreign source income Employment Income
High value added activity employment income received by a NHR shall be tax exempt from PIT provided that it is either:

Taxed in the source State according to the applicable Tax Treaty; or,

If no treaty is applicable, the income is effectively taxed in the source State and not deemed as derived in Portugal in accordance with Portuguese sourcing rules.

Other income
Foreign source capital gains, investment and rental income, together with self-employment and professional income derived from high value added activities, shall be tax exempt from PIT if:

the income can be liable to tax in the country of source, according to the applicable Tax Treaty or according to the OECD Model Tax Convention, as interpreted according to the Portuguese comments and reservations made to its articles; and

it is not deemed derived in Portugal in accordance with Portuguese sourcing rules nor deemed obtained in a tax haven.

Foreign source pensions
Foreign sourced occupational pensions shall benefit from a tax exemption if they are liable to tax in the source country in accordance with the provisions of a tax treaty or are deemed not to be derived in Portugal in accordance with the Portuguese sourcing rules, i.e., not paid by a Portuguese tax resident entity nor attributable to a Portuguese permanent establishment of a non-resident. Foreign source occupational pensions may also benefit from a potential double non-taxation should the applicable tax treaty preclude the source country from taxing the pension.(Note that taxing rights in relation to pensions of retired civil servants and other government employees generally are allocated by tax treaties to the paying country, regardless of the residence status of the recipient).

Qualifying for the status

To qualify as a non-habitual resident, an individual must meet the following requirements:

Be tax resident under Portuguese domestic legislation; and

Not have been taxed as a Portuguese resident in the five years prior to taking up residence in Portugal. An individual is tax resident in Portugal for any year in which:

He is physically present in Portugal for more than 183 days in a calendar year; or

On December 31 of the relevant tax year, he has available accommodation in Portugal as an habitual abode.

Necessary documents and requirements
Recognition of this status is not automatic, and requires activation by attending to the following formalities:

Copy of the individual’s passport;

An address in Portugal;

Application for a Portuguese taxpayer number;

Certificates of tax residence from the countries in which the individual was resident for tax purposes during the five years prior to his arrival in Portugal;

Tax assessments showing that the individual was effectively taxed in the foreign country(ies) during that five year period;

Filing a formal request.

Other documents will be required if the individual is an employee or is self-employed rendering services eligible as derived from a high value added activity.
Copies of original documents must be notarized before being submitted.

Other considerations

Wealth taxes
Portuguese tax law does not envisage wealth taxes. Only local taxes on Portuguese real estate apply (as described below). Municipal Property Transfer Tax Portugal levies a municipal tax on the acquisition of Portuguese properties at rates between 0 and 6%.
Municipal Property Annual Tax
Portugal levies a municipal tax annually based on the registered value of Portuguese real estate at rates between 0.4 and 0.8% (depending on the municipality and the type of real estate –buildings or land).
Inheritance tax
Inheritance tax on Portuguese assets is levied as Stamp Duty at a 10% rate except for spouses, descendants and ascendants, who are exempt.
Gift tax
Gift tax on Portuguese assets is levied as Stamp Duty at 10% rate except for spouses, descendants and ascendants, who are exempt. An additional rate of 0.8% is due on gifts of real estate.

Fees

Fees for the regular services can be sent on request.

Legal notice

Please note that this brochure is a brief introduction to possible tax consequences associated with a move to Portugal. It is intended only to be summary and simplifications have therefore been made. We strongly advise that individual advice be obtained before

Thousands are flocking to Lisbon as the cultural Capital takes off… Invest in the Portugal and get your own little piece.

When most outsiders think of Portugal, they are most likely to be thinking of the sandy beaches of the Algarve, the Albufeira strip of international pubs or resorts offering various package holidays for those seeking a relatively cheap 7 day break in the sun. It’s fair to say that over the past 20 years Portuguese tourism and people’s perception of the country has been focussed on the south and its ‘Costa del Sol’ atmosphere but if you focus your eye a little further north, you may be pleasantly surprised by what you find!

The Lisbon-Estoril Coast is perhaps one of Europe’s best kept secrets and its unique fine sandy beaches, which are arguably the most beautiful in Portugal, remain a little known fact.

Not only does the capital Lisbon and its cosmopolitan suburbs offer the perfect environment for holiday relaxation on the Atlantic Coast, the area has recently been coined the Mecca of Europe by the French ‘Le Parisien’ Magazine in Paris.

The capital and its unfurling coastline radiate the faded grandeur of its yesteryear and combined with its ever increasing presence as a European hotspot, its various cultural and artistic heritage scenes are taking off. That coupled with a mild ‘all-year-around climate’ and an increasing number of low cost flights into Lisbon airport (as our tourism grows year on year and 12% in 2014), Portugal is beginning to attract large amounts of foreign investment.

But that’s not all!

It is one of the cheapest places to live in Western Europe and it is still possible to snap up a luxury property for a song. As the day’s warm winter sunshine fades into a golden sunset and the capital becomes a hip buzz as the late-night capital of Europe, the beaches are not the only things going gold… check out the Portuguese Golden Visa Programme. It’s a gateway for South Africans and people from other countries to gain permanent residence in the Schengen zone when investing in a property in Portugal and we are placed to advise you on the legal paperwork and help you get up and running.

Get started today by emailing or calling us on +351 21 486 7767 for where to begin…

The Golden Visa scheme introduced by the Portuguese Government has taken off over the past year bringing with it a series of investors ready to splurge in return for a fully valid residency permit in Portugal and a Visa to the majority of the European Union.

The simplicity of the system and the benefits of the program has been a huge attraction to the Chinese community now buying up most of the Luxury property on the Lisbon Coast but other nationalities are not far behind. For a flat investment of 500,000 Euros an investor can buy access to Europe and the best part is that they merely have to spend 7 days a year in Portugal… Just enough time to sign on the dotted line for a new house!

The attractive scheme is being snapped up by non- EU residents, for more information on ways to invest click here